Germany investor confidence collapses in June – survey

LONDON (ICIS)--?xml:namespace>Germany’s investor confidence fell sharply in June amid ongoing uncertainty over the eurozone debt crisis, an economics research group said on Tuesday.

The worsening of the situation in the Spanish banking sector and the insecurity about the outcome of the Greek election are likely to have contributed to June's sharp decline, Mannheim-based ZEW Centre for European Economic Research said.

ZEW said that its economic sentiment indicator for Germany fell by 27.7 points to minus 16.9 points in June, marking its strongest month-on-month decline since October 1998. The indicator is based on a survey of 274 financial market analysts that was conducted from 29 May to 18 June.

"The financial market experts’ expectations are a strong warning against a too optimistic assessment of Germany’s economic perspectives in the remainder of this year,” said ZEW president Wolfgang Franz.

“The risks of a pronounced decline in economic activity in countries with close trade ties to Germany are very clear,” Franz said.

“In addition, there is a situation in the eurozone which continues to be precarious. The outcome of the Greek vote is a short breathing space – just that, nothing more and nothing less," Franz said.